After conducting the first blockchain-based financial transaction in May, yesterday, HSBC performed its first yuan-based transaction on Voltron. The blockchain-based interbank system could be the next Ripple and XRP killer.

HSBC Holdings plc. is one of the largest investment banks in the world. Like others, it is also exploring the potential of blockchain in transforming banking transactions. Voltron is a blockchain-based platform built on R3’s Corda. Currently, it has eight members including Standard Charted, BNP Paribas ING, and Natwest.

HSBC piloted Voltron in China by assigning the first yuan-denominated letter of credits.

Credit letters are documents issued by the bank that provides assurances of payment. It can be issued for trade transactions or to provide guarantees for lenders. An issuance on a blockchain between banks would replace bureaucracy and corruption in the system. Reportedly, the annual volume of credit letters in an out of China in 2018 was around $750 billion.

Ajay Sharma, HSBC’s regional head of global trade and receivables finance for Asia-Pacific, told the media,

“We are hoping that we will have something by end of the year, maybe the first quarter of next year, where will we know from Voltron what it costs, at which point, a lot of banks who might be sitting on the sidelines will be able to make a decision,”

Currently, the SWIFT network is employed to conduct transactions worldwide. However, it takes up to 10 days to complete the documentation process on it.

The goal of Voltron is similar to that of Ripple with XRP – to reduce cost and increase the speed of transactions. While Ripple aims to eliminate SWIFT in the financial industry, independent or jointly developed blockchain platforms by banks pose a big threat to XRP’s price.

Recently, rumors of Ripple dumping XRP in the market had caught a lot of attention. However, the CEO of Ripple clarified and promised less dumping.

Nevertheless, XRP has continued its bearish trend with a growing possibility of altcoins capitulation. The price of XRP at 5: 20 hours UTC on 3rd September 2019 is $0.26.

source: coingape.com

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